Bank accounts frozen by cyber crime agencies should be unfrozen, with only the disputed amount placed in fixed deposits, pending a decision by a Judicial Magistrate within three months to ensure due process under the law.

ORDER

This writ petition has been preferred by the petitioner under Article 226 of the Constitution of India praying for the following reliefs:

"a) Issue a writ of mandamus or any appropriate writ or order to directing respondent no.2, Kotak Mahindra bank, Vijayanagar Branch to unfreeze the bank account of the petitioner having Account no. 4649490185, IFSC Code: KKBK0005915.

b) Issue a writ of mandamus or any other appropriate writ or order to directing respondent no. 2, Kotak Mahindra bank, Vijayanagar Branch torestore the full operation of the bank account of the petitioner.

c) That, the Hon'ble Court may: direct to R-1 may frame the guidelines on the same issue to regulate the UPI system by the business persons in the certain specific safeguards during this process.

d) Issue any other relief, which this Hon’ble court deems fit in the peculiar facts and circumstances of the case."

Learned counsel for the petitioner has submitted that the case of the petitioner is squarely covered by the decision rendered by this Court in the case of Malcolm Murayis & Ors. Vs. State Bank of India and Others Malcolm Murayis & Ors. Vs. State Bank of India and Others passed in W.P. No.1100 of 2024 dated 26.04.2024.

So far as the decision rendered in the case of Malcolm Murayis (supra) is concerned, the same reads as under:-

"1] This order shall also govern the disposal of W.P. Nos.1100/2024 and 1185/2024 as in both the petitions identical reliefs have been sought by the parties.

2] These petitions have been filed by the petitioners under Article 226 of the Constitution of India seeking the following reliefs:-

“a) This petition may kindly be allowed with cost.

b) To direct the Respondent No. 2 thereby directing Respondents to remove the hold/freeze on the Bank account of petitioners.

c) Issue such other orders, writ, and direction as this Hon’ble court deems fit in the interest of justice in favour of petitioner.”

3] The grievance of the petitioners is that they are engaged in trading of crypto and virtual currency, and having their bank accounts with State Bank of India and ICICI Bank, which have been freezed all of a sudden, only on the intimation sent by the cyber cells of the various police stations, viz., respondent Nos.3 to 9, to freeze the aforesaid account on the allegation that the accounts are involved in some cyber fraud. The amounts of which have also been disclosed, as to how much of the amount is credited in the account of the petitioners, which are linked to cyber crime/fraud.

4] Counsel for the petitioners has submitted that the petitioners have never received any notice from any police station regarding their involvement in any such offence, and even otherwise, they are lawfully carrying out their business of trading, and it appears that some person who was involved in fraud has transacted through the petitioners. Thus, it is submitted that the petitioners may be allowed to operate their bank account, and so far as the amount which is said to be credited on account of the cyber fraud, it is submitted that it may be kept in separate fixed deposits so that the same can be withdrawn as and when the clean chit is given to the petitioner. Counsel has also submitted that none of the investigating agencies have complied with Section 102 of Cr.P.C. and have not informed the concerned Magistrate about such seizure. Thus, it is submitted that the petition be allowed.

5] Counsel for the respondents Banks have submitted that the Banks have not freezed the account of the petitioners on their own but only at the instructions of various cyber cell police stations, and are bound by the instructions issued by such investigating authorities. Thus, it is submitted that the appropriate orders may be passed.

6] Heard counsel for the parties and perused the record.

7] From the record, it is found that this Court vide its order dated 14/03/2024 has passed an interim order in the following manner:-

“Heard on the question of admission